Monday 16 January 2017 07.46 EST
First published on Monday 16 January 2017 05.51 EST

Berlin has mounted a staunch defence of its policies after Donald Trump criticised the German chancellor, Angela Merkel, for her stance during the refugee crisis and threatened a 35% tariff on BMW cars imported into the US.

Germany’s deputy chancellor and minister for the economy, Sigmar Gabriel, said on Monday morning that a tax on German imports would lead to a “bad awakening” among US carmakers since they were reliant on transatlantic supply chains.

“I believe BMW’s biggest factory is already in the US, in Spartanburg [South Carolina],” Gabriel, leader of the centre-left Social Democratic party, told the Bild newspaper in a video interview.

“The US car industry would have a bad awakening if all the supply parts that aren’t being built in the US were to suddenly come with a 35% tariff. I believe it would make the US car industry weaker, worse and above all more expensive. I would wait and see what the Congress has to say about that, which is mostly full of people who want the opposite of Trump.”

In an interview with Bild and the Times, the US president-elect had indicated that he would aim to realign the “out of balance” car trade between Germany and the US. “If you go down Fifth Avenue everyone has a Mercedes Benz in front of his house, isn’t that the case?” he said. “How many Chevrolets do you see in Germany? Not very many, maybe none at all … it’s a one-way street.”

Asked what Trump could do to make sure German customers bought more American cars, Gabriel said: “Build better cars.”

Shares in carmakers BMW, Daimler and Volkswagen fell on Monday morning following Trump’s comments. BMW shares were down 0.85%, shares in Daimler were 1.54% lower and Volkswagen shares were trading 1.07% down in early trading in Frankfurt.

All three carmakers have invested heavily in factories in Mexico, where production costs are lower than the US, with an eye to exporting smaller vehicles to the American market.

A BMW spokeswoman said a BMW Group plant in the central Mexican city of San Luis Potosi would build the BMW 3 Series starting from 2019, with the output intended for the world market. The plant in Mexico would be an addition to existing 3 Series production facilities in Germany and China.

Responding to Trump’s comments that Merkel had made an “utterly catastrophic mistake by letting all these illegals into the country”, Gabriel said the increase in the number of people fleeing the Middle East to seek asylum in Europe had partially been a result of US-led wars destabilising the region.

“There is a link between America’s flawed interventionist policy, especially the Iraq war, and the refugee crisis, that’s why my advice would be that we shouldn’t tell each other what we have done right or wrong, but that we look into establishing peace in that region and do everything to make sure people can find a home there again,” Gabriel said.

“In that area Germany and Europe are already making enormous achievements – and that’s why I also thought it wasn’t right to talk about defence spending, where Mr Trump says we are spending too little to finance Nato. We are making gigantic financial contributions to refugee shelters in the region, and these are also the results of US interventionist policy.”

In brief remarks on Monday, Merkel said of Trump’s comments on Nato and the European Union: “We Europeans have our fate in our own hands.” Speaking during a press conference with New Zealand’s prime minister, Bill English, she said: “He has presented his positions once more. They have been known for a while. My positions are also known.”

Trump’s remarks on Nato were met more favourably in Moscow, where Dmitry Peskov, spokesman for the Russian president, Vladimir Putin, agreed with the US president-elect that the alliance was “obsolete”.

“Since Nato is tailored toward confrontation, all its structures are dedicated to the ideals of confrontation, you can’t really call it a modern organisation meeting the ideas of stability, steady growth and security,” he said.

Peskov said Russia had not been conducting talks with the US about nuclear arsenal reduction and said cancelling sanctions was not a political goal in Russia.

“Russia wasn’t the initiator in introducing these restrictions, and Russia, as the president of Russia has underlined, doesn’t intend to raise the issue of these sanctions in its foreign contacts,” he said.

Last month, Putin said Russia needed to strengthen its strategic nuclear forces. Leonid Slutsky, a Russian MP, said he “wouldn’t connect these two issues and make the cancellation of sanctions a negotiating point in such a delicate area as nuclear security”.

Konstantin Kosachyov, head of the foreign affairs committee in the Russian senate, said the cancellation of sanctions was “definitely not an end in and of itself for Russia”.

“It’s not even a strategic goal for which something needs to be sacrificed, especially in the security sphere,” he told state news agency RIA Novosti. “We think [sanctions] are a bad legacy of the departing White House team that need to be sent after it into history.”

Following Trump’s election victory in November, Merkel had offered the president-elect close cooperation on the basis of the shared values of “democracy, freedom, and respect for the law and the dignity of man, independent of origin, skin colour, religion, gender, sexual orientation, or political views”.

Gabriel, who is expected to run as the centre-left candidate against Merkel in Germany’s federal elections in September, said Trump’s election should encourage Europeans to stand up for themselves.

“On the one hand, Trump is an elected president. When he is in office, we will have to work with him and his government – respect for a democratic election alone demands that,” Gabriel said. “On the other hand, you need to have enough self-confidence. This isn’t about making ourselves submissive. What he says about trade issues, how he might treat German carmakers, the question about Nato, his view on the European Union – all these require a self-confident position, not just on behalf of us Germans but all Europeans. We are not inferior to him, we have something to bring to the table too.

“Especially in this phase in which Europe is rather weak, we will have to pull ourselves together and act with self-confidence and stand up for our own interests.”

Merkel’s spokesman, Steffen Seibert, said the chancellor had read the Trump interview “with interest”, but declined to comment in more detail until the president-elect had been sworn in. “We are now waiting for President Trump to start his term and will then work closely with the new government,” he said.

Martin Schäfer, a spokesman for the German foreign ministry, rejected Trump’s labelling of the EU as a “vehicle for Germany”. He said: “For the German government, Europe has never been a means to an end, but a community of fate which, in times of collapsing old orders, is more important than ever.”

The foreign ministry also rejected Trump’s criticism that creating “security zones” in Syria would have been considerably cheaper than accepting refugees fleeing the war-torn country. “What exactly such a security zone is meant to be is beyond my comprehension and would have to be explained,” said Schäfer, adding that there had not been enough willingness among the international community to lend military support to create a no-fly zone in Syria.

Pierre Moscovici, European economic affairs commissioner, also found fault with Trump’s assertion that other European countries would follow in Britain’s footsteps and leave the EU.

“I’m not worried, I think this idea that Brexit is going to be contagious is a fantasy, a bad fantasy,” Moscovici told reporters in Paris. “Brexit is not a great thing,” he said, warning Trump that comments advocating a break-up of the EU would not get the trans-Atlantic relationship off to the best start.